Best Places to Hide Money, Compensation for Terrorism Victims, Sanctions Relief, and More on Regulatory Enforcement Actions

This week, John and Elliot discuss the Transparency International report on the best places to hide dirty money, several actions in the sanctions area including relief from some sanctions on Syria, the DOJ’s distribution of $1billion to victims of state-sponsored terrorism, several bank regulatory actions, recent court decisions relating to the Beneficial Ownership registry and the Corporate Transparency Act, and other items impacting the financial crime prevention community.

Best Places to Hide Money, Compensation for Terrorism Victims, Sanctions Relief, and More on Regulatory Enforcement Actions - Transcript

Elliot Berman: Hi John, how are you today?

John Byrne: Good, Elliot. Happy New Year. Was able to have a really nice vacation with the family in Ireland. We spent a good seven or eight days there. Avoided rain, which is always good. So it was a really nice trip. So glad to be back.

Elliot Berman: Glad you had a good trip and that you're back just in time for our Marquette Golden Eagles to be leading the Big East, 13-2 overall, 3-0 in the Big East, and I'm going to see them play Georgetown tonight.

John Byrne: Excellent, yep, seventh in the country, so we're moving up. So a bunch of things have happened over the holidays. Most of what we'll talk about will be recent. Maybe a couple of other things that drifted over from late December, but the Treasury has issued a number of sanctions as they typically do in reaction to various things. So just very quickly, again, we always urge you to sign on to the Treasury website and get their daily messaging.

First one is a sanctions of a corrupt Hungarian official. Hard to imagine how they were able to isolate one, but here we go. This was Antal Rogan, who was a senior Hungarian government official, who was involved in various types of corruption. And they designated it under the Global Magnitsky Human Rights Accountability Act.

Treasury also sanctioned several Sudanese paramilitary leader, weapons supplier, and related companies, so that was a individual plus others, and that's again, for violating various human rights laws. And then the third one that I have on my list here is related actually there's two, so one very quickly is the sanctions against Integrity Technology Groups, that's a Beijing bank cyber security company, and there's information in that discussion that talks about the threat assessments and those sorts of things.

And the last one is Additional Sanctions Relief. This is a positive one from OFAC, and that's a general license to expand authorization for activities and transactions in Syria following December 8th of 2024, the end of Assad's brutal reign. So this was one in reaction to a number of humanitarian groups who said, they're trying to figure out ways of getting assistance to the people of Syria, and OFAC has issued a general license to enable that to occur.

Elliot Berman: And related to terrorism, the Justice Department announced distribution of over a billion dollars to compensate victims of state sponsored terrorism. At the very end of last year, the special master who's been appointed to work with the Justice Department to collect funds that are recovered or penalties that are grabbed as a result of state sponsored terrorism, authorized the distribution of an additional slightly over a billion dollars to 19,000 victims of state sponsored terrorism. So this is not the first payment I think the total to date is about seven billion dollars.

I think this effort will continue but it not that this makes people whole in any way, but it is an ongoing effort to try to balance things when people are hurt as a result of state sponsored terrorism.

John Byrne: We would be remiss if we didn't mention that we are recording this the week of January 6th, fourth anniversary, if you will, of the attack on the Capitol by what I will call domestic terrorists.

One of the things that came out earlier this week related to that is the FBI has released new information about a pipe bomb suspect. As you'll recall, the pipe bombs were placed, they never detonated, but near both the RNC and the DNC headquarters the day before January 6th of 2021. So now there's additional video information, and the FBI is upped the award to $500,000 for information leading to the individual's arrest and conviction.

I wanted to mention that. Obviously a lot of the adjacencies to January 6th, 2021 are still some are still in the courts still being discussed. One of the things that happened over the holidays, sadly two events, but one was an awful event in New Orleans was the area where the individual crashed and killed I think it was at least 14 people. And then was shot and killed by the police.

But in Las Vegas, an individual blew himself up before a Trump hotel, and the information about this particular individual, former military, was that this person wanted a civil war the information that provided he was a special forces master sergeant, he had blew himself up in a Tesla cybertruck. And fortunately no one else was killed, but people were definitely injured and left behind a lot of information including the notion of wanting to cause issues in Washington in a number of ways, so fortunately that, that didn't occur, but wanted to mention that at all.

Bottom line is, I don't think we should forget what happened on January 6th going forward. It was a clear attempt to overruled the will of the people back then, and that is domestic terrorism, in my humble opinion.

Elliot Berman: You mentioned some things related to corruption a little earlier. One that I thought was interesting was an announcement by OCCRP about the most corrupt individual of 2024. And I'll let you have the the chance to announce who they chose.

John Byrne: Yeah, the OCCRP named Bashar al Assad as a 2024 person of the year, which is not an award that one wants. It highlights the individual who's done what they call the most to advance crime and corruption globally, of course, damaging democracy and human rights.

And they actually have done this for a number of years. They said for 13 years, they've done this award, if you will, by an expert panel of judges from civil society, academia, and journalism. According to OCCRP, they don't have any control themselves over who is nominated. They come from people worldwide. So an interesting story about, about that and the process.

And as always OCCRP does tremendous work in uncovering corruption throughout the world and obviously any threat to democracy and transparency. And Press Freedom, which obviously is going to be on the table this year. If you don't already subscribe to their free I think it's weekly messages they send out, it's the Organized Crime and Corruption Reporting Project.

And related to that, another group that we've worked with quite a bit, Transparency International over the holidays they issued a study. The study under the category of Dirty Money's Hiding Spots: Corruption Funds Disappear Overseas, and they list some of the areas around the world where monies can be hidden. And they look at over 74 jurisdictions that they've looked like they've found this. For companies, the British Virgin Islands, Panama, the Seychelles, are the top incorporation hubs. For real estate, France, UK, UAE, and us in the U. S., with a preferred location for purchasing properties connected to suspicious activity. For bank accounts, Hong Kong, Switzerland, UK, UAE again, and the United States, key destinations for bank accounts used to pay bribes, move or store dirty funds. The report goes on to the top ten most frequent asset locations by the number of cases.

Also, they talk about real estate, as we mentioned. And in the US, for example, New York attracted the most suspicious real estate purchases with seven properties in the state linked to the cases they looked at, followed by Maryland, California, and Florida. They also look at properties by country and type of legal ownership, and there's several other important categories there.

So again this is Transparency International put out over the holidays. Transparency International also sends out weekly messages that you can subscribe to their press releases.

Elliot Berman: Yeah, we've talked as long as we've been doing this podcast about regulatory orders issued coming out of either investigations or more often regular examination cycles. And there are two things in that area that we just want to mention. First is while we were away there was an announcement by the OCC that Bank of America, was receiving a cease and desist order related to their anti money laundering program. There was no fine included, at least at this point.

And the other thing that was interesting is a Kansas bank, and I think we mentioned this when it first came out, a Kansas bank which had received a very stern regulatory order, including a $20 million fine from the FDIC. And this bank is about 90 million dollars in assets. So $20 million for a $90 million bank is a very big fine. The bank has filed suit. Contesting the charge and arguing that the enforcement action is disproportionate to the risk the bank was taking. That it would have a very adverse effect because of its size, given the size of the bank.

We'll see what happens as this winds its way through the courts. But it's interesting, there was a decision called Chevron by the US Supreme Court in the last year or so that changed the rules that the courts defer to the agencies when looking at penalties and things like that. And we may see more of these actions where banks choose to contest the size of penalties and things like that because the courts will now have an opportunity to exercise a more independent review.

John Byrne: Elliot, it did reverse the Chevron decision from 1984. But the case for legal beagles out there is Loper Bright Enterprises vs. Raimondo and Relentless vs. Department of Commerce. So those two cases ruled on by the Supreme Court that did overturn the 1984 Chevron case.

Elliot Berman: Yeah, thanks. Thanks for clearing that up. The other one that there was a lot of action, but not a lot of forward motion, and that's on the beneficial ownership registry. As we've talked about a number of times there was a case brought, the result of which was the judge enjoined the enforcement of the rules related to putting corporate information into the registry.

FinCEN appealed to the Federal Circuit Court. The initial Circuit Court decision was to limit the injunction to just the parties to the lawsuit, including the members of one of the trade groups. A follow on decision from the same Circuit Court reversed that and put the injunction back in place and FinCEN has filed notice of appeal to the U. S. Supreme Court.

Supreme Court doesn't have to take the case and even if they do at this point it's January so it's unlikely that it would be heard before the fall term. But we'll see. There are expedited processes, but we'll have to see if they even decide to take the case.

John Byrne: So sticking with court issues this week also, there's two cases that have been pending in the courts related to the incoming president. One there is a lot of debate on whether or not Merrick Garland should release Jack Smith's final report on the Trump investigation. And that was both as on the mishandling of classified documents and also the investigation into 2020 election interference.

Just today, as we go to record, Judge Eileen Cannon down in Florida blocked the release of the final report arguing that there are, co-defendants that have appealed the blocking of the report. And that needs to be heard. So that's one issue that's that's out there. There's also the attempt by the Trump lawyers to block the sentencing in what's been called the hush money trial that has been denied as of our recording.

We'll see what happens. It's supposed to be, the sentence is supposed to be announced on the 10th, when you'll hear this recording. We'll see at that point if something changes in the next couple of days.

Elliot Berman: John, I know you're working on the January webinar. You want to tell our listeners about that?

John Byrne: It's Human Trafficking Awareness Month, and so we're going to be doing another anti human trafficking webinar. We're working. with Polaris and several federal government agency representatives to identify the topics and issues for this particular month.

What we've done in the past, we've given you information on red flags and typologies, updates use of data, that sort of thing. So we want to make sure that our January program is both practical and provides new information. So we're working on that and we'll probably work up until the until the last minute, it's January 23rd at 1 o'clock Eastern Time.

Elliot Berman: Yes, and in addition to that, we encourage our audience members to continue to check our website for other resources. We have a number of blog posts and podcasts that are gonna be posted over the next few weeks, catching up after the lull for the holidays. And we think you'll find those to be of on interesting topics and to be valuable. So John, I will talk to you next week.

John Byrne: Take care Elliot, stay safe, and I hope you'll see a really good game tonight.

Elliot Berman: Thanks a lot for the tickets, and you be safe too, bye bye.